Rational Inattention, Competitive Supply, and Psychometrics

Andrew Caplin, Dániel Csaba, John Leahy and Oded Nov

No 25224, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We introduce a simple method of recovering attention costs from choice data. Our method rests on a precise analogy with production theory. Costs of attention determine consumer demand and consumer welfare just as a competitive firm's technology determines its supply curve and profits. We implement our recovery method experimentally, outline applications, and link our work to the broader literature on inattention and mistaken decisions.

JEL-codes: C14 C91 D01 D04 D11 D6 D8 (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-neu and nep-upt
Note: TWP
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Citations: View citations in EconPapers (6)

Published as Andrew Caplin & Dániel Csaba & John Leahy & Oded Nov, 2020. "Rational Inattention, Competitive Supply, and Psychometrics*," The Quarterly Journal of Economics, vol 135(3), pages 1681-1724.

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Journal Article: Rational Inattention, Competitive Supply, and Psychometrics* (2020)
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